UPDATED 08:54 EST / JULY 26 2010

Android Market to Accept Carrier Billing for Apps, Strengthens Mobile Economy

Apple may be dealing with Antennagate right now, as it begins to hand out free cases for iPhone 4 users. But the Android Market continues to grow in relevance to the mobile industry. Late last week Google announced changes in the legal department, highlighting new payment options for apps. Android users will soon be able to bill app payments to their carrier–a necessary move for Google considering the widespread presence of its mobile OS across devices and carriers alike. From Google’s developer blog,

Please note that we have updated the Android Market Developer Distribution Agreement (DDA). This is in preparation for some work we’re doing on introducing new payment options, which we think developers will like.

In the spirit of transparency, we wanted to highlight the changes:

*

In Section 13.1, “authorized carriers” have been added as an indemnified party.
*

Section 13.2 is new in its entirety, covering indemnity for payment processors for claims related to tax accrual.

These new terms apply immediately to anyone joining Android Market as a new publisher. Existing publishers have been notified of this change via email; they have up to 30 days to sign into the Android Market developer console to accept the new terms.

Getting Around Google

Some customers already had the option to pay for apps and have the cost billed to their wireless provider, but the widespread changes in the Android Market are significant as Google continues to push its mobile OS as a platform. Interesting, then, that the changes were made at all. Google has a prime opportunity to promote its own Checkout payment platform, a product it’s been building incentives around for years now. That’s also been a sticking point for Google, as many prefer to circumvent the portal, especially when purchasing products for their mobile devices.

The mobile app economy introduced an arousing opportunity for mobile OS providers to make some cash, moving away from the familiar purchasing process for mobile apps prior to dedicated smart phone markets like the iTunes’ App Store or the Android Market. Finding a viable way to work around this gives Google a chance to expand beyond Apple, as carrier payments will help encourage purchases overall.

Virtual Currency Centralization

This speaks to the virtualization of currency. It’s becoming more global, less tangible and more centralized around our service providers–not our financial institutions. Good thing for the carriers; they’ll be able to provide more services through apps, and generate more revenue related to data transfer.

There are a number of companies taking advantage of Android’s very broad approach, including rival Baidu. The Chinese search engine has created a widget for Android users, with hopes to expand its presence through Android’s platform reach. A necessary strategy, as Baidu bides time before launching its own platform (should the search engine company move in this direction). AOL is another search tool that’s moving to Android, with localized results and easy access to its other products (if you still use them).

Still-fragmented Market

Yet the centralizing of virtual currency is actually a rather fragmented cause, looking at the multiple access points consumers now have. Mobile devices have made it easier than ever to spend money, wherever you are, whenever you want to. The multiple layers payment portals have for the positioning of these access points is just as fragmented as the app marketplace itself.

For developers, this is yet another factor to consider when creating an app for Android. Consumers will likely be encouraged by the broadened options regarding app-related purchases, giving carriers a few perks towards selling smart phones and data packages.

As mobile economies begin to flourish, platform providers like Microsoft will need to ensure they support third party apps–it’s a coming standard. Carriers like AT&T will also need to find more ways to accommodate the design and use cases of the apps themselves.


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